Delaware Supreme Court Reverses Forum Non Conveniens Dismissal
Berger v. Intelident Solutions, Inc., No. 596, 2005, 2006 WL 1132079 (Del. Apr. 26, 2006).
Plaintiff, a minority shareholder in a Florida corporation, filed a breach of fiduciary duty action in connection with a freeze-out merger. The sole defendants were a Nevada limited partnership, which was the ultimate controlling entity of the Florida corporation, and a Delaware corporation formed to serve as an intermediate holding company in connection with the merger. Defendants moved to dismiss based on forum non conveniens, arguing that forcing them to litigate in Delaware would impose an overwhelming hardship. The Court of Chancery granted that motion, finding that the dispute would be more appropriately litigated in Florida and that Defendants had met the exacting standard applied in assessing forum non conveniens motions.
The Delaware Supreme Court disagreed and reversed. The Supreme Court acknowledged that the case raised very important issues of unsettled Florida law, that all of the evidence and witnesses were located in Florida, and the only connection to Delaware was that the holding company created to transact the merger was incorporated in Delaware. The Supreme Court ultimately determined, however, that this was not a rare case justifying dismissal and that there was no showing of overwhelming hardship.